Jousting continues over Renewable Fuel Standard mandate

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• While farmers cheered the price bump — both wheat and soybeans also enjoyed increased prices — the tug-of-war between the livestock/poultry sectors and ethanol industry over the dwindling corn supply shows no sign that either side is about to give ground.

On Thursday (Oct. 11), the USDA’s downward revision of the drought-hit U.S. corn crop (from 10.73 billion bushels to 10.71 billion bushels) was followed by an unsurprising rise in the market price for the commodity, which hit over $7.74 per bushel.

While farmers cheered the price bump — both wheat and soybeans also enjoyed increased prices — the tug-of-war between the livestock/poultry sectors and ethanol industry over the dwindling corn supply shows no sign that either side is about to give ground. In fact, recent events have only led to more resolve by the competitors.

And right now the focus of debate is the Renewable Fuel Standard (RFS http://www.epa.gov/otaq/fuels/renewablefuels/index.htm), a government mandate requiring 13.2 billion gallons of ethanol be blended into the 2012 U.S. fuel supply. That mandate, which became law in 2005, calls for 13.8 billion gallons in 2013.

The RFS has long been a target for those claiming it has unfairly impacted animal feed prices and led to the demise of thousands of U.S. livestock, poultry and dairy operations alongside rising world food prices. In response to these factors, in recent months, a loose group of RFS naysayers has petitioned the EPA to waive the mandate until conditions are more favorable.

The EPA — expected to make a ruling on the RFS in November — is also being pushed by politicians to rule in favor of the suspension. Governors of Arkansas and North Carolina asked for an RFS waiver in late August, triggering the EPA review. Since then, governors from Delaware, Georgia, Maryland, New Mexico and Texas — along with 156 U.S. Representatives and 34 U.S. Senators — have joined in.

The latest lawmaker asking the EPA for a waiver is Utah Sen. Orrin Hatch, who wrote EPA administrator Lisa Jackson a letter on Wednesday: “In the face of corn shortages and escalating prices brought on by wide-spread droughts throughout the United States, I urge you to exercise your waiver authority to modify the corn-ethanol requirements for the Renewable Fuel Standards.”

Push-back against efforts to waive the RFS has been quick and vigorous. Rejecting the connection between the mandate/ethanol and high corn/feed prices, renewable fuel and farm groups formed a coalition in late September. Fuels America (www.FuelsAmerica.org)counts the National Association of Wheat Growers, National Corn Growers Association (NCGA), National Farmers Union, National Sorghum Producers, 25x25, Abengoa Bioenergy, ACORE, Advanced Ethanol Council, American Coalition for Ethanol, American Security Project, Biotechnology Industry Organization, DuPont, Growth Energy, Novozymes, POET and the Renewable Fuels Association among its members.

“In joining Fuels America, NCGA joins a broad spectrum of renewable fuel stakeholders to increase the effectiveness of our efforts in the defense of ethanol and other biofuels,” said NCGA President Garry Niemeyer, a farmer from Auburn, Ill., in a statement.